Shares in Marks & Spencer Group (LON:MKS) have fallen deep into the red in today’s session as the high street retailer posted a fall in full-year revenue and profits. The further unveiled a rights issue as it looks to finance its joint venture with Ocado (LON:OCDO).
As of 08:47 BST, Ocado’s share price had given up 4.18 percent to 259.86p. The shares are significantly underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.49 percent lower at 7,364.64 points.
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M&S posts full-year results
Marks & Spencer announced in a statement this morning that its revenue had fallen three percent to £10.4 billion in the 52 weeks ended March 30. The retailer’s profit before tax and adjusting items meanwhile came in 9.9 percent lower at £523.2 million. The company further trimmed its payout to shareholders by 25.7 percent to 13.9p.
“We are deep into the first phase of our transformation programme and continue to make good progress restoring the basics and fixing many of the legacy issues we face,” Marks & Spencer’s chief executive Steve Rowe said in the statement, adding, however, that the company had “not been consistent in our delivery in a number of areas of the business”.
M&S further confirmed a £601.3-million rights issue to finance the creation of a new 50/50 joint venture with Ocado.
Analysts weigh in on statement
“The results give proof, if it were needed, that M&S required a significant shot in the arm to give it relevance in the modern day,” Richard Hunter, head of markets at Interactive Investor, commented, as quoted by the BBC, adding, however, that there were “also positive signs as M&S transforms apace”.
“If there were a real requirement for M&S, however, it would be to consolidate its food offering, while strengthening its online presence to give it security and relevance in the new digital age,” adding that “the Ocado deal could provide that answer”.